Are you frustrated with high commission fees when working with OTAs (Online Travel Agencies) like Booking.com, Agoda, and Expedia? Do you want to increase your revenue but don’t know where to start? Don’t worry, you’re not alone. Thousands of hotel owners around the world are facing similar challenges. However, with the right strategies and the support of technology, you can overcome these difficulties and lead your hotel to success. Let Hotel Link guide you through the art of effective OTA management in this article.
The rapid growth of OTAs has provided opportunities for hotels, from large chains to small boutique establishments. In the past, getting guests to notice your hotel required significant traditional marketing efforts and high costs. However, with OTAs, hotels can easily showcase their information to millions of global travelers with just a few clicks.
Yet, along with the opportunities come challenges. OTAs often charge a commission fee of 15-25% per booking, putting pressure on hotel revenue. Without effective management strategies, hotel owners can easily fall into over-dependence on OTAs, which can affect hotel profitability.
Did you know that over 70% of today’s travelers search for and book hotel rooms online? This means that if your hotel is not listed on major OTAs like Booking.com or Agoda, you’re missing out on a significant number of potential guests. However, alongside the benefits, using online distribution channels also presents challenges for hotels. Below are some common challenges hotels face when using OTAs:
One of the biggest issues hotels face is over-reliance on OTA platforms. While OTAs are an important source of guests, the commission fees charged for each booking are often quite high. Without a strategy to balance attracting customers from OTAs and direct booking channels, hotels can easily get caught in a cycle of high costs, reducing profitability.
Moreover, depending on OTAs can cause hotels to lose control over the guest experience. Customers usually only see basic information about the hotel on OTAs, which reduces the hotel's ability to personalize their experience.
Commission fees from OTAs often present a significant financial burden for hotels, especially smaller or mid-sized ones. With commission rates ranging from 15-25%, hotel profits can be significantly reduced, particularly when a large portion of bookings come through OTAs.
Managing OTA channels can become quite complex and time-consuming for hotel owners. How can hotels maximize the potential of OTAs while ensuring profitability and maintaining brand reputation? To address these challenges, hotel owners can apply the following effective solutions:
Each OTA platform has different policies and partnership conditions. To make the most of OTAs, hotels need to thoroughly understand the regulations, promotional programs, and offers provided by OTAs. This helps hotels not only optimize costs but also participate in special OTA promotions, increasing visibility to guests.
For example, some OTAs offer premium listings or loyalty programs. If your hotel meets the requirements to participate in these programs, it will significantly increase bookings without spending too much on advertising.
A key factor in managing OTAs is the ability to manage room rates and availability flexibly and promptly. Hotels should use Channel Manager tools to synchronize information on room rates and availability across all OTA platforms. This helps prevent overbooking or selling rooms at inappropriate prices.
Additionally, applying a Dynamic Pricing strategy is another way to optimize revenue. Hotels can adjust room rates based on market demand, time of year, or competition with other hotels. This is especially useful during peak periods when hotels can increase prices to maximize revenue while ensuring full occupancy.
OTAs provide a wealth of data on customer behavior, including where they come from, when they book, and the amenities they prefer. Leveraging this information helps hotels better understand their target audience and implement appropriate marketing strategies.
For example, if a hotel notices that most of its guests come from a specific geographic area, it can optimize its marketing campaign to attract more guests from that region. Or if the data shows that many guests are interested in amenities like spa or restaurant services, the hotel can create special offers to attract more bookings.
Although OTAs are an important channel, increasing direct bookings will help hotels reduce commission fees and increase profits. To achieve this, hotels need to invest in a professional website, optimized for mobile devices, and integrated with an online booking system.
Furthermore, hotels can encourage guests to book directly by offering attractive incentives such as discounts, loyalty points, or additional services. A good marketing strategy on the website and social media will also help increase direct bookings, reducing reliance on OTAs.
Read more: Creating Booking Experience: Streamlining Hotel Reservation Process!
To reduce the pressure of commission costs, hotels can apply several strategies:
You may be interested in: Why Does A Hotel Need A Channel Manager?
Modern technology is making OTA management easier and more efficient than ever. Tools like Channel Manager, Yield Management, Smart Rate and PMS (Property Management System) not only help synchronize information quickly but also provide valuable insights for making accurate business decisions.
Learn more: PMS System – Indispensable Management Tool for Hotel Industry Today
Effective OTA management not only helps hotels maximize revenue from these platforms but also optimizes costs, improves the guest experience, and enhances competitive advantages in the market.
If you're looking for effective OTA management solutions and ways to optimize your hotel’s revenue, don’t hesitate to contact Hotel Link. Our digital toolbox for hotel will help your business grow its revenue significantly. Hotel Link is ready to support you with the most professional and optimized management tools!